Financial Incentives for Combined Heat and Power in California

Size: px

Start display at page:

Download "Financial Incentives for Combined Heat and Power in California"

Annabel McDowell
7 years ago
Views:

1 Financial Incentives for Combined Heat and Power in California Climate Policy Initiative Dialogue October 17, 2012 Melicia Charles California Public Utilities Commission Energy Division 1

2 CPUC Mission The CPUC serves the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement and a healthy California economy. We regulate utility services, stimulate innovation, and promote competitive markets, where possible, in the communications, energy, transportation, and water industries. 2

3 Implementing Energy Priorities and Overseeing Key Issues The CPUC regulates investor-owned electric and gas utilities (such as PG&E, SCE, SDG&E and SCG), which serve over two-thirds of electricity demand and over threequarters of natural gas demand in the state. 3

4 CHP in California ARB Scoping Plan In addition to renewables and EE, calls for increased reliance on CHP for reducing GHG emissions CPUC oversees a number of CHP programs This presentation will focus on programs supporting small CHP (>20 MW) 4

5 Self-Generation Incentive Program SGIP provides incentives for DG technologies which have demonstrated a need for financial support in order to encourage customer adoption Goals of SGIP Reduce greenhouse gas emissions (SB 412 in 2009) Reduce peak load demand (historical goal from inception in 2001) Budget $83 Million program budget per year $77 Million for incentives, $6 Million for program administration Incentive budget split 75% for renewable/emerging and 25% for nonrenewable Budget Allocated across IOUs as % of electric and natural gas sales No new budget collection authorized after 12/31/2014 (AB 1150 in 2011) SGIP Program authorized through 2016 (AB 1150 in 2011) 5

6 SGIP Program Incentive Structure SGIP offers incentives to offset the cost of capital investment 50% upfront, 50% based on performance Renewable Fuels and Waste Heat Capture Fuel Incentive ($/W) Wind n/a $1.25 Waste Heat or bottom cycle CHP n/a $1.25 Pressure Reduction Turbine n/a $1.25 Gas Turbine CHP Renewable $2.50 Microturbine CHP Renewable $2.50 IC Engine CHP Renewable $2.50 Non-Renewable fuels Gas Turbine CHP NG $0.50 Microturbine CHP NG $0.50 IC Engine CHP NG $0.50 Emerging technologies Advanced Energy Storage n/a $2.00 Fuel Cell CHP or electric only NG $2.25 Fuel Cell CHP or electric only Renewable $ Date: September 26, 2011

7 Self-Generation Incentive Program History History: Originally designed in 2001 as a rebate program focused on larger projects to complement CEC s Emerging Renewables Program (ERP), which focused on similar technologies, but at a smaller scale. Started in response to energy crisis in 2001 SGIP Policy Developments: 9/2006: AB 2778 limits SGIP to fuel cells and wind 1/2007: CSI Program begins and solar incentives are removed from SGIP 4/2008: D raises 1MW cap on incentives to a tiered 3MW 9/2008: AB 2667 establishes 20% rebate incentive bonus for CA suppliers 1/2008: D makes storage coupled with DG eligible for $2/W 1/2009: SB 412 modifies SGIP goals to focus on GHG reductions 9/2011: D Includes wind, fuel cells, gas turbines, micro-turbines and internal combustion engines, waste heat capture, CHP, energy storage, and pressure reduction turbines. 9/2011: AB 1150 extends SGIP through

8 CHP Systems vs. Other SGIP Technologies Technology Projects Capacity (kw) SGIP Incentive ($) CHP ,053 $124,249,722 Fuel Cell -Electric Only ,210 $223,627,873 Wind Turbine 13 9,563 $13,466,847 Energy Storage 2 1,600 $3,200,000 Total ,426 $364,544,442 Date: October 15,

9 CHP Systems Installed by Year Renewable Non-Renewable Year Projects Capacity (kw) Projects Capacity (kw) , , , , , , , , , , , , , , , Total 46 16, ,331 9 Date: October 15, 2012

10 CHP Systems Installed by Territory Program Administrator Projects Capacity (kw) SGIP Incentives ($) California Center for Sustainable Energy 40 22,300 $10,365,621 Pacific Gas and Electric ,615 $54,482,715 Southern California Edison 85 36,232 $25,117,053 Southern California Gas Company ,906 $34,284,333 Total ,053 $124,249,722 Date: October 15,

11 CHP Systems Installed by Technology Type Technology Projects Capacity (kw) SGIP Incentive ($) Fuel Cell 34 1,020 2,550,000 Gas Turbine 10 26,451 6,564,285 Internal Combustion ,554 93,018,411 Microturbine ,029 22,117,026 Total , ,249,722 Date: October 15,

12 Net Energy Metering (NEM) Full-Retail NEM Eligible Technologies: Solar, wind, biomass, geothermal, renewable fuel cells, small hydroelectric generation, digester gas, municipal solid waste conversion, landfill gas, hydro technologies. Onsite Load: DG facility size limited to serve onsite electric needs. Export/Import: NEM customer-generator export to the grid, and import (consume) from grid Only pay for the net on a billing period basis. Credits: NEM customers can rollover excess bill credits up to a year. Bill credits offered at the bundled full-retail rate. 12

13 AB 1613 Waste Heat & Carbon Reductions Act CHP Feed in Tariff (Blakeslee, 2007) Pricing set at avoided cost of CCGT GHG compliance costs (if applicable) for exported electricity paid by IOU Qualifying Criteria New or repowered facilities 60% minimum efficiency, sized to thermal need < 20 MW in nameplate capacity Must have QF certification Approved Pro Forma Contracts (Resolution E-4424, Dec. 1, 2011) 20 MW Standard Contract and 5 MW Simplified Contract Pending Pro Forma Contracts 500 kw Contract (ALs filed 6/25/2012; approval pending) Executed Contracts None to date (as of October 2012); 2-3 expected. 13

14 Questions?

California Distributed Generation (DG)

California Distributed Generation (DG) Timothy Alan Simon Commissioner, California Public Utilities Commission Chair, Gas Committee, National Association of Regulatory Utility Commissioners Harvard Electricity